Purpose of Expansion

The company while expanding in global markets needs to have clarity of what’s the purpose of expansion.

Companies move in to global markets for various aspects of benefit its not just about starting a new business in new country to be benefited its also about knowing what’s the benefit. The benefits can be in various formats, some companies look in global market to help in reducing the technology cost as it may be cheaper in some other country.

The availability of low cost and technologically well advanced labour can play crucial role which will ensure company to look for global markets only for R&D work and setting up only the R&D labs rather than full business.

Cost of production will be low when compared to current area of business this entices many companies to look for new geographical areas as the cost of production either due to forex inequalities ensures that your current company area of business can give you better margins when produced in other country and ensure the margins increase and give you better stability in terms of financials.

Expansion globally is also right way of increasing valuations of the company and gaining confidence of the investors. This shouldn’t only be the reason for expanding globally.

The product you want to sell to the same products that are existing in the market need to have clarity on why will the customers of new country buy you product when compared to the existing product in there own country.

Is it just the global expansion is the need of hour and setting up offshore company to ensure that funds received are in global markets and the current business doesn’t need to pay taxes. If this is the case then need to understand the policies of government in both places and can this be done as taxation is still going to be problem if not clearly solved and taxation problems can make lot of difference.